Life Insurance Needs Calculator
Ensure your family's financial future by calculating your ideal coverage.
Recommended Coverage Amount
How Much Life Insurance Do You Actually Need?
Determining the right amount of life insurance is one of the most critical financial decisions you will make for your dependents. A generic "10 times your salary" rule often fails to account for specific debts, lifestyle choices, and future goals like college tuition.
The DIME Formula Explained
Expert financial planners often use the DIME method to evaluate coverage:
- Debt: Sum of all your consumer debt and final expenses.
- Income: How many years of your salary does your family need to maintain their standard of living?
- Mortgage: The payoff amount of your home loan.
- Education: The estimated cost of sending your children to university.
Realistic Example Calculation
Consider a professional earning $75,000 per year with a spouse and two young children. They have a $300,000 mortgage and want to provide 15 years of income replacement.
- Income Replacement: $75,000 x 15 = $1,125,000
- Mortgage payoff: $300,000
- College Fund: $150,000
- Total: $1,575,000
Subtracting $100,000 in existing 401k savings, their net need is $1,475,000. This ensures the family can stay in their home and the children's education is secured regardless of the circumstances.
Why Coverage Matters
Life insurance isn't about you; it's about those you leave behind. Proper calculation prevents your family from being forced to sell their home or change their educational path during a time of grief. Use the calculator above to get a personalized estimate based on your unique financial footprint.